SAUDI Arabia has declared to stop crucial oil shipments along the Bab al-Mandeb strait, after two ships were destroyed by rebel forces in Yemen's Iran-backed Houthi movement, sparking fears shipments to Europe and the United States could be suspended.

A full blockade would prevent almost 4.8 million barrels of crude oil and refined petroleum products from being shipped per day to the US and EU, after the world's top oil exporter announced plans to block the strategic waterway.

Saudi Arabian authorities will halt shipments through through the Red Sea "until the situation becomes clearer and maritime transition through Bab al-Mandeb is safe".

This comes after Houthis rebels in Yemen attacked Saudi tankers in July, escalating tensions between the Saudi-led coalition and the Iran-aligned movement.

Western allies backing the Saudi-led coalition against the Houthis expressed their worries about the attacks, but have yet to declare a strategic plan to counteract the rebel group's aggression and secure the Babe al-Mandeb strait.

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We’re just one missile away somewhere from getting into a more direct confrontation.

Helima Croft

A counteract strategy by the West would increase their involvement in the conflict between Saudi Arabia and Iran, which they plan to avoid, as the Arab states continue to battle for regional supremacy.

However, Saudi Arabia officials are urging Western allies to strengthen its support towards for the war in Yemen against the Houthis movement.

Sadad al-Husseini, energy consultant and former executive at Saudi Aramco said: "Rather than allowing these hostile manoeuvres to go unnoticed in the eyes of the world, the Saudi (energy) minister has placed Iran's subversions of the whole global economy under the spotlight for everyone to see.

"The capture of the port of Hodeidah will go a long way towards putting an end to these disruptions."

Saudi Arabia has announced plans to stop oil shipments to the US and EU via the Bab al Mandeb strait (Image: GETTY)

Almost 4.8 million barrels of oil produce per day will not be shipped across the Red Sea (Image: REUTERS/Ahmed Jadallah)

James Dorsey, senior fellow at Singapore’s S. Rajaratnam School of International Studies said: “The Houthis are trying to provoke a situation where there’s a great effort to negotiate an end to the war in Yemen.

“The Saudis are trying to create a situation in which the U.S. would in one form or another significantly step up support ... so that they can claim military victory.”

Speaking about the conflict, Helima Croft, global head of commodity strategy at RBC Capital Markets said: “We’re just one missile away somewhere from getting into a more direct confrontation."

It is unclear when the Saudi Arabian government will resume shipments through the Red sea, but officials have other ways to ship crucial oil produce to Europe and the US.

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According to reports, the Saudi-led coalition launched several airstrikes on Houthi positions across war-affected Yemen after Houthi rebels fired a ballistic missile at Riyadh that was intercepted near the Saudi Arabian capital

A still image taken from a video distributed by Yemen's pro-Houthi Al Masirah television station shows what it says was the launch by Houthi forces of a ballistic missile aimed at Riyadh's King Khaled Airport

Saudi Arabia will most probably use the East-West Pipeline to transport oil shipments to the US and EU, the same currently ships crude from fields in its Eastern Province to the Red Sea port of Yanbu.

Experts say the US should provide naval escorts and tankers to protect shipments against attacks by Houthis rebels.

Earlier in January, the UN said existing protection measures are not sufficient to prevent future attacks against shipments.